Transcript

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Redfin’s Home Buying ClassApril 4, 2012 San Francisco, CA

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AgendaConsidering…● To buy or not to buy● Market conditions● Searching for a homeLooking…● Finding a real estate agent● Working with RedfinBreak!Buying…● Mortgages● The offer and the deal● Short sales and bank owned

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A Little Bit About Who We AreRedfin is a real estate brokerage that has helped over 20,000people buy or sell a home; 97% would refer us to a friend.● Customers, not commissions● Informed decisions● The right home for the right price No obligation Get back a portion of your commission

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Why You Should Buy a Home● You have a family and need room to grow● You expect to stay put for 5 or more years● You want a home that is difficult to rent● You’re handy & and ready to invest● You’ve saved up a down payment

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Why You Shouldn’t Buy a Home● You don’t have a good reason like family or schools● You can’t afford the down payment● You can rent for much less● You plan on moving soon● You’re worried about job security

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Case-Shiller – By the NumbersSan Francisco Area Down 5.4% year-over-year Peak was May 2006 Down 41.1% from peak Currently at February 2002 prices20-City Composite Down 3.8% year-over-year Peak was July 2006 Down 33.8% from peak Currently at February 2003 prices

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Where is the Market Headed?● Supply of homes is at a five-year low and won’t increase the rest of the year● Foreclosures have been driving price declines, likely years of inventory remain● Rents have been rising, making buying more attractive)● Market stabilizing, though likely 2-3 years before significant appreciation● Rate increases - biggest issue for buyers

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National Market Trends● New construction inventory low, sales rising and confidence rising too.● Pending home sales hit a 19-month high.● Actual closed home sales increased 4%.● The number of homes on the market declined 18% over the past year.● Foreclosure sales fell to a four-year low.● Prices will remain stable in 2012.

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What to Ask Any Agent● Is this your full-time job?● Familiar with foreclosures or short-sales?● Where were your last five deals?● Who else will be working with me?● Will you show me all properties for sale?● When am I committed to working with you?● Has a client ever filed a complaint?● How are you paid?

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How Our Team Works AGENT Responsible for your success Writes your offer Handles negotiations YOU COORDINATOR FIELD AGENT Schedules tours Takes you to see homes Prepares paperwork See 50+ homes a week Works with escrow

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We Share Our Commission With You• We refund a part of our commission to you subject to the approval of your lender and the home seller • Applied to closing costs • Refund is tax-free

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Show Stable EmploymentSalaried Employee o W2’s are historic o Most recent paystubs o Raises count immediatelySelf-Employed o Two Year History o Same line of workHourly Wage Earner o Consistent hours over 1-2 year period

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Deal Room Important milestone tracker Your to do list Your team of agents

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Home Inspection HintsWatch out for: Look for and Check:•Galvanized steel pipes •Chimney sweep fireplace •Double-paned windows•Knob and tube wiring inspection •Well ventilated attic •Check all included •Stairs have handrails•Mold, mildew or signs of appliances leaking near walls or floors •Check water pressure

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SampleHUDA form that yourlender is required toprovide to you oneday before closing. Itlists the final closingcosts and fees foryour loan.By law, the final costslisted on your HUD-1must be within 10% ofthe estimatesprovided on yourGood Faith Estimate(GFE).

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What is a Short Sale? The owner owes more on the mortgage than the home is worth ● Usually pre-foreclosure, but not always ● Listed for less than what’s owed to the bank ● Requires 1 - 2 banks’ approval (usually 2) ● May have other liens (taxes, utilities, HOA)

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We Can Help With A Short Sale● See short sales with a Redfin agent● If you want to buy, work with a Redfin agent or a short sale partner agent● Redfin partner agents work for other brokerages but share Redfin’s commitment to customer service● Get a 15% commission refund

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What is a Bank-Owned Property?A foreclosed home owned by a bank or lenderStandard sale but:● Verbal negotiations● Long response times● Repairs unlikely● Legal addenda may require an attorney● Limited or no disclosures● Banks demand use of their own contracts● Bank can back out any time until they’ve signed● Contract often requires early release of earnest money

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So… Where’s the Best Deal?● Sellers who own their home outright● Sellers who are relocating● Estate Sales

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So What Now?● Make sure it’s the right time for you● Start browsing online● Check out our Home Buying Guide and Events page● Find the right agent● Get pre-approved & look for a lender● Start seeing homes● Make an offer & close the deal

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Favorite Data Links ● Case-Schiller Indices: Pricing trends by metropolitan area ● Altos Research: Median price trends and days on market by city, but some complain data is unreliable ● MSN Home Affordability Calculator: Based on your income & credit score ● SmartMoneys Home Buying Worksheet: Similar to the MSN calculator, but requires more info

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Favorite Mortgage Links ● Bankrate: Many ads, but is great for comparing local lenders ● Zillows Mortgage Marketplace Help Center: Articles mortgage rates, types of mortgages, credit reports, and a series of mortgage calculators ● The Mortgage Professor: Bare bones information on mortgages, definitions of common terms, myriad of mortgage calculators ● HUD FHA page: Most reliable explanation of FHA loans, good site for first-time buyers

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Favorite Links Cont.● Remodeling & renovations ► DoItYourself.com: A few ads, but a useful clearinghouse of information on remodeling ► National Association of Home Builders (NAHB): Articles on remodeling your home, most are good